New Energy Vehicles (NEVs) in China

FairAndUnbiased said:

Even more poignant: Huahong NEC was a semiconductor JV with Japanese NEC back in the 1990s. When Japanese semiconductor companies went down, Huahong NEC also went down and stayed down. Only recently has their foundry subsidiary Huali Semiconductor achieved 22 nm.

They were completely surpassed by SMIC which started production in 2001 and was not a JV but went at it alone.

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One of my favorite examples is turbo-fan engines. Let's say you hand over the entire set of design to any company or country outside US,UK,France,China,Russia. I serious doubt any of them can produce the similar engines with similar compliance requirements or service level agreements. Many can make a few "demoware", but very few can "produce" commercial grade deliverables.

pmc said:

why will they built battery plant in Germany with super expensive labor/utilities and declining auto market. I doubt most Europeans can afford German built cars unless they are majority built in Eastern EU with global parts. and seeing where world is heading. Europe will be the last place for industrial investment.

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Remember that Germans already buy expensive German made cars.

The CATL battery factory in Germany already have contracts with Tesla and Stellantis.
This avoids EU import tariffs on the batteries and reduces the supply chain risk. Can you imagine a car factory waiting months for batteries to arrive on a container ship which got stuck in the Suez Canal for example?

With a local German factory, it also means CATL batteries cross the local content threshold to be counted as made in the EU. In a few year's time, the UK will start imposing import tariffs on the entire value of an electric car if the battery isn't classed as made in the UK/EU.

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On a side note, the EU will also start imposing tariffs on the entire value of an electric car from the UK if the battery isn't made in the UK/EU.
It's a way to encourage the batteries to be made in the EU/UK.

Otherwise, batteries could be made in China, then it would attract a small import tax. Then those batteries could circulate freely inside cars anywhere in the EU/UK.

AndrewS said:

Remember that Germans already buy expensive German made cars.

The CATL battery factory in Germany already have contracts with Tesla and Stellantis.
This avoids EU import tariffs on the batteries and reduces the supply chain risk. Can you imagine a car factory waiting months for batteries to arrive on a container ship which got stuck in the Suez Canal for example?

With a local German factory, it also means CATL batteries cross the local content threshold to be counted as made in the EU. In a few year's time, the UK will start imposing import tariffs on the entire value of an electric car if the battery isn't classed as made in the UK/EU.

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On a side note, the EU will also start imposing tariffs on the entire value of an electric car from the UK if the battery isn't made in the UK/EU.
It's a way to encourage the batteries to be made in the EU/UK.

Otherwise, batteries could be made in China, then it would attract a small import tax. Then those batteries could circulate freely inside cars anywhere in the EU/UK.

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Yes when Germany was a rich country it could buy some percentage of cars that were at Tesla Model 3 level with government incentives and wholly Chinese built. notice i used past tense.
as in indicated to you in another thread. Germany need to concentrate its resources on products in quantity /quality that are needed by US and Middleast at reasonable price. reasonable price means they really need to subsidize those products. As only these two entities will keep them afloat. . afloat does not mean they have luxury of battery cars with all associated semiconductors , display panels, larger wheels which is associated with heavier battery vehicles. i am thinking of Japanese Kei vehicles that are suitable for Europe. Alternative is revenge dish best serve cold.

tphuang said:

CATL built a factory in Germany. It has a major partnership recently announced in Indonesia. BYD has quite a few overseas (US, Canada, Brazil, Thailand and Hungary among them) and is apparently building a really large one in Poland also. CATL is also exploring building factory in Poland.

We will see what happens in terms of market access. Countries will start to ask for technology for market access. As CATL and BYD get larger, these things are not really avoidable. You can't expect everyone just buying your stuff without creating local jobs.

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BYD is spreading its eggs to many baskets for insurance against possible lockdowns, supply chains issues, sanctions, crackdowns, closed markets, tariffs, etc. Can't have them all in China.

If energy gets more expensive, or less of it is available, in Germany they will cut production of budget cars and focus on luxury vehicles.
This will leave the market wide open for countries where energy is cheaper, like China, to export into Europe.
You might see Turkey also become a major automobile producing center. Since they aren't sanctioning Russian energy.
European budget car manufacturers will be slaughtered.

3.16 billion is a pocket change nowsaday. US has already lost the battery industry competition with China.

4Runner said:

Tech transfer is not nearly as easy and simple as politics or propaganda portrays. Basically all non-tech people were talking. Cases in point:

(1) SAIC is an abject failure of China auto JV strategy.
SAIC helps VW and GM dominate the markets as well as helps those companies achieve efficiencies they could only dream. SAIC never mastered ICE technologies. It is basically a merchant and an assembler. But Shanghai has wasted enormous resources and opportunities because of SAIC JVs. It would have been a lot better if SAIC went a self-sufficient hard way.

(2) FAW was the cradle of China auto industry.
But FAW lost its independent importance after its JVs. FAW has never learned what it supposed to learn from its JV partners.

(3) SAW a.k.a. Dong Feng became nobody
Worse than FAW, it went with JVs and never focused on its own development. Where is Dong Feng nowadays?

(4) BYD
BYD is a "土生土长" Chinese auto company by an "安徽老土". I guess Wang Chuan Fu is laughing all the way to the bank while laughing his ass off of JVs and SOEs.

(5) Great Wall
Great Wall found its niche and established its brand while surrounded by a bunch of JV wolfs.

Technology transfer is way more overrated than most think.

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For some reason chinese automakers (not just the big 4) love to create a ton of shitty marques with multiple products in the same segment, degrading their ability to create a strong brand overseas

BYD is nuts, with lockdowns sales increased

sndef888 said:

For some reason chinese automakers (not just the big 4) love to create a ton of shitty marques with multiple products in the same segment, degrading their ability to create a strong brand overseas

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I can try to list a few factors that contribute to that phenomenon.

(1) As I mentioned in a previous post, each province and tier-one city is essentially its own economic eco-system, even though they are part of an integrated national economy. It sounds like a contradiction. But like many other things in China and as Chairman Mao said, contradiction is norm as well as opportunity.

(2) Even though west often says China has a long-term strategic plan, the history of China says majority of people and institutions have been short-term, because of their entrenched interests and self-preservation.

(3) The best group of people who have been creating and maintaining premium brands are jewish. If you compare thinking and action between the two people on branding, you may glean some detailed insights.

(4) The western MSM definitely is motivated to "抹黑" any Chinese significance, because that suits their short-term and long-term interests.

(5) The world has been brain-washed by the western civilization for 300 years. It is extremely hard for Chinese brands to educate those brain-washed people. Heck, still there are so many people in China are still buying German cars, Japanese cars or even Korean cars. As a car owner of A6 and LX470 and 4Runner of decades, I can tell you that establishing a premium brand against MSM brain-washing is an extremely difficult undertaking.